Abcourt moves into gold with control of Aunore

A year ago SNC Inc., the large Montreal-based engineering firm, was high on its 17.8% interest in Aunore Resources and its role as operator on the old Peel-Elder gold mine near Rouyn in northwestern Quebec.

Now the project doesn’t seem to fit into SNC’s plans and the company has decided to sell its entire holdings in Aunore to Mines Abcourt. Greenwich Resources is also selling its 22% stake in Aunore to Abcourt.

Richard Fraser, a commercial director with SNC and a vice- president of Aunore, says the sale was made because the project didn’t fit in with SNC’s mix of assets.

“It certainly wasn’t a disenchantment with the Elder project,” says Mr Fraser.

The price of the sale has not been disclosed, but it is believed to be very close to market price which was $1.15 per share at the close the day the sale was announced. No followup bid for other shares of Aunore is contemplated.

Abcourt has also granted a put to a limited partnership which, if exercised, will give Abcourt full ownership of the partnership. The limited partnership will hold 1,449,000 shares of Aunore once flow- through shares for 1986 exploration are issued. When combined with the purchase of the SNC and Greenwich interests, the transactions will give Abcourt 45% ownership of Aunore.

An underground exploration program has been under way on the Elder property which is 65% owned by Aunore and 35% owned by Nova Beacauge Mines. The former producer operated from 1947 to 1966 supplying fluxing ore to the Horne smelter in Rouyn.

Its historic grade during that period was 0.155 oz gold per ton, but Abcourt President Renaud Hinse says more selective mining could increase that grade to 0.17 oz. The company already estimates two million tons of ore reserves grading 0.185 oz before dilution.

Aunore has budgeted $8 million for exploration on the property in 1987 to confirm and improve the reserves. Abcourt says it plans to put the property into production in the first half of 1988.

Abcourt will act as operator on the project.

Mr Hinse says the purchase of control of Aunore is part of Abcourt’s plan to diversify into gold. It already owns the Abcourt- Barvue silver-zinc mine in northwestern Quebec.

Abcourt is well funded to make the purchase, he says. For the year ended June 30 the company made a net profit of $186,000 after $320,000 was paid out in dividends. It also has about $6.5 million in working capital of which about $3 million is needed for current operations at the Abcourt-Barvue mine.